"Seize or Sue" only applies to consumer goods in BC, not real property (real estate). That's why they're coming after you for the deficiency.

Judgments effectively last forever since they can be renewed every 10 years.

Footloose, further to this:

I was in the process of negotiating a settlement with Genworth - however they have now sent the debt to third party collections.

1. The foreclosure date was November 2010 (judgment filed March 2010 - sale completed November). Does the 2 year statute of limitations apply here, or because it's already reported as a judgment - does the creditor reserves the right to get an enforcement order for up to 6 years? (Note I never made any payment, or officially acknowledged the debt)

2. Note this foreclosure took place on a property in BC, and is registered in a BC court. (I currently reside in Ontario). Is it true that BC operates under a "seize or sue" law? If so, please advise how this may apply here.

@dryfter

Do not confuse the "purge" rules of Equifax and TransUnion with the Limitation periods of the various Provinces and Territtories.

For example, in Ontario, under the Limitations Act, 2002, the general limitation period for commencing a legal action on a commercial debt such as a credit card, bank loan, line of credit, etc. is 2 years. That means that if a commercial debt goes into default, the creditor has 2 years to start an action to sue you.

However, that debt will remain on your Credit Report for 6 years from the "Original Date of Default with the Original Creditor" until it is purged by either Equifax or TransUnion. In other words, a debt may be "statute-barred" but still remain on your Credit Report until it is "purged".

If a creditor shows the debt as "bad debt" or "written off", that means that the debt has been written off the books of the creditor. It doesn't mean that the debt has been extinguished. The creditor will still show the debt on your Credit Report for a total of 6 years until it is "purged".

If the debt is assigned to a collection agency, the collection agency will first attempt to contact the debtor to make arrangements to get this debt paid. If the debtor refuses to cooperate or attempts to evade paying this debt, then the collection agency will report this debt to the credit bureau as a "collection" account. That means that this same debt could appear in 2 locations. First as a "Trade" account with the original creditor and second, as a "Collection" account with the collection agency.

Whether any collections are made on this account or not, the account will "purge" at the identical same time both as a "Trade" account and as a "Collection" account.

Once an account has been "purged", either as a "Trade" account or as a "Collection" account, it can NEVER be placed back on a Credit Report again. It's like "water over the dam"................GONE FOREVER.

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Educating one Consumer at a time

Hi footloose,

Quick question, I was under the impression that an old creditor could not put a stats barred collection account on the collection portion of of your credit bureau? Does this only apply if the debt is older then the purge period of 6 years or in theory could a creditor or collection company put a collection on your bureau for a debt that was say 10 years old?

I am just wondering if I have had it wrong this whole time! haha

Dryfter

Settling a debt long after the "Date of Last Activity" now becomes a "moral" issue for some consumers. In addition, the fear of the telephone ringing from collectors looking for money is also worrisome for many consumers and they would just as soon resolve this outstanding debt issue.

Everyone has a different tolerance level for people chasing them for money. If you can take the "heat", you're allowed to stay in the kitchen.

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Educating one Consumer at a time

Thank you for the very informative response. I will certainly take these recommended actions.

Thanks for clarifying the purge rules. So with that said, what incentive does somebody have for settling a debt, say 4 years after Date of Last Activity? Seems to me, you're just better off using the money to apply for more secured credit, as settling the debt won't have any impact on your score.

In response to your questions:

1. In order to explain the difference in your Beacon Score, between 2 recent dates, you would have to have both of these Reports in front of you and compare each item, line by line. Credit Scores tend to move up and down depending upon when creditors report changes to the credit bureau either in the form of charges, withdrawals or payments on an account. Also, if a collection activity appears on an account for the first time, or an account is purged that contains "Derogatory" information, these activities will cause a change in your Credit Score. Your debt to credit limit ratio is also an important factor and any change in that ratio will be reflected in your Credit Score.

2. Your Credit Score took a major "hit" when you defaulted on your Visa Desjardins and CIBC Visa credit cards together with the 2 judgments reported for your Mortgage as well as your LOC with your previous credit union. The 2 credit cards will be assigned an R9 rating, which is the worst rating that you can have and will remain on your Credit Report for 6 years from the "Original Date of Default with the Original Creditor". When these credit cards are purged together with your judgments, your Credit Score will take a big leap forward. It matters not which account or accounts you pay down first because the damage has already been done and paying off these accounts will have no effect on your Credit Score. Once an account has been paid or settled, it will show as "Paid" to a reader of your Credit Report. Only time can improve your Credit Score. Also, once an account shows that it has been written off and placed with a collection agency to collect, that does not necessarily mean that this account will show up on your Credit Report as a collection account. It is normal practice that when an account is placed with a collection agency, that the collection agency will first contact the debtor and attempt to work out some payment arrangement to settle the debt. If it appears that the debtor is refusing to cooperate or is evading all efforts by the collection agency to settle the account, the collection agency will then contact the credit bureau and list this account as a collection account. This will show to a reader of your Credit Report that you have refused to pay this defaulted account and thereby, puts them on notice.

3. When a judgment is placed on your Credit Report, it will show as "Disposition Unknown" until it is paid off. When your house went into foreclosure, the bank obtained a judgment which it registered in the court in the jurisdiction in whch your property was located. Because this mortgage was insured by Genworth Financial and the bank was fully reimbursed for any shortfall, it is the responsibility of the bank to notify the court office that this judgment has been paid. Frequently, banks and other creditors fail to do this. Contact your bank that held the mortgage and request that they show the judgment as paid at the court office. Once that is done, the court office will report that information to the credit bureaus. Up until just recently, it was common practice to not report mortgages to the credit bureaus but that practice is changing. Many lenders are becoming concerned that should there be a rise in interest rates, there could be a flood in mortgage defaults. And so, more and more lenders are beginning to report mortgages and foreclosures to the credit bureaus much like secured car loans and when a vehicle is repossessed. In all likekihood, if you have negotiated a settlement with Genworth Financial, that will not show up on your Credit Report. Therefore, this will have no impact on your Credit Score.

4. I would highly recommend that you get a secured credit card. Here is a tip. If you can get a secured credit card for say $1,500, take a cash advance of $1,000 and purchase a GIC. Take this GIC to your bank and request a secured bank loan for 1 year using the GIC as security for the loan. This way, your Credit Report will show that you have both a credit card and a bank loan. With the $500 remaining on the credit card, purchase a tankful of gas and/or put some goceries on the card each month but be sure to pay off these purchases each month. In this way, you will be able to obtain an unsecured credit card within 6 months with probably a much higher credit limit. Then watch your Credit Score start to rise.

5. If the defaulted credit cards are past the Statute of Limitations, then let "sleeping dogs lie" unless you feel that you have a moral obligation to settle these accounts. If a collection agency threatens to place these accounts as a collection account on your Credit Report, you will then have to decide whether to settle or not. As to the "purge" rules, see my recent post under the heading "RE: Negotiate or leave run out -------advice please" posted on Friday June 1, 2012.

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Educating one Consumer at a time

I'm in the process of rebuilding credit after a tough couple of years for my business. I elected against filing bankruptcy or proposal. We did however lose our home in a foreclosure back in 2010.

Fortunately, in the past year things have changed for the better and I now have sufficient income to settle all my debt one by one over the next 12-18 months.

I pulled my Equifax 2 days ago and here is how it looks:

Beacon: 530

Current Active Accounts:

Auto Loan - Paid as agreed and up to date
Cap One Master Card - Paid as agreed and up to date
Visa Desjardins - Bad debt, collection account or unable to locate
CIBC Visa - Bad debt, collection account or unable to locate
A number of accounts paid and closed, including 2 auto loans, a second mortgage, and a LOC.

Public Records:

Judgment: Mortgage - My foreclosed mortgage is still showing up as "Disposition Unknown". - March 2010

Judgment: Line of Credit with my former credit union. Also showing as Disposition Unknown, but I do still owe this amount.

Collection Accounts:

Utility Company
Lawyer Fees

Now, a couple of questions.

1. I just applied for a sub-prime car loan and was told by the dealer my Equifax beacon was actually 580. Certainly I'm not complaining, but why a 50 point discrepancy from when I pulled the report myself?

2. Obviously it will take time to fully repair my bruised credit, but does the order in which I settle these accounts make any difference in the speed in which my score will increase? Am I better off to clear the oldest debts, the largest debts etc? Also am I better off to clear the judgments and collection accounts first, or the accounts that have been written off? Oddly enough, these written off accounts have been placed for collections, but are not reflected on my report as such.

3. Regarding the home foreclosure - as this has been settled almost two years ago, why is it still showing disposition unknown? There are currently no monies owing on this to the lender as they were paid from Genworth. How should this actually be reflected on my report? I've been told in Canada, as mortgages are typically not reported to your credit - that many foreclosures may not actually show up on the report if the debt has been paid. Is this true?

I currently have an outstanding debt with Genworth as they paid the lender for the shortfall on the sale. I've negotiated a settlement with Genworth. What impact (if any) will paying the settlement have on my credit?

4. Should I apply for more secured credit now, to start rebuilding my score, or is it better to just use the money to payoff all debts? I was thinking 2 years from now, if all my debts were settled, it would look better having 2 year old accounts in good standing instead of having no active accounts.

5. My oldest delinquent account is a CIBC Visa with date of last activity of August 2008, and date of last payment around the same time.

As the statute of limitations has expired, am I better off to just let this account purge after the 6 years, or should I negotiate a settlement? If settled, the date of last activity restarts, and it takes another 6 years to purge. Correct or not?

Any advice is appreciated.